Lawmakers voted May 26 to override the governor’s veto of a bill that authorizes a state takeover of management duties for the Omaha school retirement plan.
LB147, sponsored by Seward Sen. Mark Kolterman, transfers duties and responsibilities for management of the OPS plan from the Omaha School Employees Retirement System board of trustees to the Public Employees Retirement Board, which manages the rest of the state’s plans through the Nebraska Public Employees Retirement Systems.
The transfer will take effect Sept. 1, 2024. The school district, board of education, board of trustees and the PERB must finalize a transfer of management agreement by Dec. 31, 2021.
LB147 passed May 20 on a 38-3 vote.
In his veto message, Gov. Pete Ricketts called the measure a “slippery slope” toward the state eventually assuming responsibility for the troubled retirement plan’s nearly $1 billion unfunded liability. He characterized LB147 as the “pivotal step” in a series of moves by OPS designed to shift the plan’s financial burden to the state.
“State management erodes the distinction between the state’s existing school retirement plan and the OPS pension plan,” Ricketts said. “Without clear distinctions, future legislators will likely assume responsibility over both plans, which has always been OPS’s intention.”
Kolterman offered a motion to override the veto, which he called a “disappointment.” He noted that the bill contains an explicit provision that OPS remains “at all times and in all circumstances solely liable” for all the plan’s funding obligations.
He said he “can’t imagine a scenario” in which lawmakers ever will vote to take on the OPS plan’s unfunded liability.
“I don’t see that happening,” Kolterman said. “There’s nothing in this bill that results in a cost to the State of Nebraska.”
Omaha Sen. Justin Wayne supported the motion, saying LB147 will allow teachers at OPS to return to focusing on students rather than managing their retirement plan.
“Does it make sense for educators to be pension fund managers?” he said.
North Platte Sen. Mike Groene opposed the motion. He said the bill is an incremental step toward OPS asking the state to assume liability for the plan.
“Eventually, this will become the state’s responsibility,” Groene said.
The measure includes components of three additional bills related to the transfer, all sponsored by Kolterman.
Provisions of LB145 require completion of a compliance audit by Nov. 15, 2021, and the first annual audit by the state auditor by July 1, 2022.
Lawmakers voted 31-18 to override the governor’s veto. Thirty votes were required.